BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE CODELL FORMATION, HEREFORD FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 421

 

DOCKET NO. 170100072

 

TYPE: SPACING

 

ORDER NO. 421-81

REPORT OF THE COMMISSION

 

The Commission heard this matter on January 30, 2017, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to establish two approximate 1,280-acre drilling and spacing units and to approve up to six new horizontal wells in each approximate 1,280-acre drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Fifth Creek Energy Operating Company, LLC (“Fifth Creek” or “Applicant”), as applicant herein, is an interested party in the subject matter of the above-referenced hearing.

 

2.         Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

 

3.         The Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order pursuant to the Oil and Gas Conservation Act.

 

4.         Rule 318.a. of the Commission Rules provides, on unspaced lands, a well to be drilled 2,500 feet or grater shall be located not less than 600 feet from any lease line, and shall be located not less than 1,200 feet from any other producible oil or gas well when drilling to the same common source of supply, unless authorized by the Commission.

 

5.         On December 1, 2016, Fifth Creek, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to establish two approximate 1,280-acre drilling and spacing units and to approve up to six new horizontal wells within each approximate 1,280-acre drilling and spacing unit, with the productive interval any horizontal well in each of the proposed units to be no closer than 300 feet from the boundaries of the unit and not less than 150 feet from the productive interval of another well within each unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation, unless the Director grants an exception:

 

Township 12 North, Range 62 West, 6th P.M.

Section 21:      All (Portions lying within the State of Colorado)

Section 28:      All

(DSU #1)

Township 12 North, Range 62 West, 6th P.M.

Section 22:      All (Portions lying within the State of Colorado)

Section 27:      All

           

(“DSU #2”)

 

6.         On January 9, 2017, Fifth Creek, by its attorneys, filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits.  Sworn written testimony and exhibits were submitted in support of the Application.

 

7.         Land testimony and exhibits submitted in support of the Application by P.M. Di Grappa, Land Manager for Fifth Creek, showed that both the mineral and surface interests in the Application Lands are owned in fee, and that Fifth Creek owns a partial undivided leasehold ownership interest in the Application Lands.

 

8.         Geologic testimony and exhibits submitted in support of the Application by Benjamin Burke, Geologist for Fifth Creek, showed the Codell Formation is present throughout the Application Lands and ranges from approximately 19 to 22 feet in thickness across the Application Lands.

 

9.         Engineering testimony and exhibits submitted in support of the Application by Salina Derichsweiler, Senior Reservoir Engineer for Fifth Creek, demonstrated that the estimated recovery factor for the Codell Formation is predicted at 448,000 barrels of oil per horizontal well with a drainage area of 175 acres, and that 300 foot setbacks in the 1,280-acre drilling and spacing units, with the requested number of wells, will promote efficient drainage, protect correlative rights, and prevent waste.

 

10.       Applicant stated that the wells will be drilled from no more than five well pads within each of the two proposed drilling and spacing units to be located within such unit, unless an exception is granted by the Director.

 

11.       The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.

 

12.       Fifth Creek agreed to be bound by oral order of the Commission. 

 

13.       Based on the facts stated in the verified Application, having received no protests, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to establish two approximate 1,280-acre drilling and spacing units and to approve up to six new horizontal wells in each approximate 1,280-acre drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.            An approximate 1,280-acre drilling and spacing unit for the below-described lands is hereby established, and up to six new horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell Formation.

 

Township 12 North, Range 62 West, 6th P.M.

Section 21:      All (Portions lying within the State of Colorado)

Section 28:      All

(DSU #1)

 

2.         An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and up to six new horizontal wells within the unit, are hereby approved, for the production of production of oil, gas and associated hydrocarbons from the Codell Formation in the proposed drilling and spacing unit.

 

Township 12 North, Range 62 West, 6th P.M.

Section 22:      All (Portions lying within the State of Colorado)

Section 27:      All

(“DSU #2”)

 

3.            The productive interval of any horizontal well within each of the proposed units shall be no closer than 300 feet from the boundaries of the unit and not less than 150 feet from the productive interval of another well within the unit, unless an exception is granted by the Director.

 

4.            Any wells permitted under this Order shall be drilled from no more than 5 well pads within the unit, unless an exception is granted by the Director.

 

IT IS FURTHER ORDERED:

 

1.         The provisions contained in the above order shall become effective immediately.

 

2.         The Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

 

3.         Under the State Administrative Procedure Act, the Commission considers this Order to be final agency action for purposes of judicial review within 35 days after the date this Order is mailed by the Commission.

 

4.         An application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

 

ENTERED this 14th day of February, 2017, as of January 30, 2017.

                                   

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

By ____________________________________      

Julie Murphy, Secretary